Regulatory Alerts2002-04-16 | Resolución 039/2002Added · Updated
Resolution 039/2002
The Board of Directors of the Central Bank of Bolivia modifies the interest rate for loans granted by NAFIBO SAM under Sectoral Program II (Loan No. 88 65 719) and Program BV-C2. The fixed annual rate of 7.15% is replaced by a variable rate calculated on the six-month LIBOR rate prevailing 180 days before each amortization installment's due date, plus a 3% margin. This adjustment applies to the total loan amount of US$36.6 million and remains effective until the conclusion of the loans.
BOARD RESOLUTION NO. 039/2002
SUBJECT: FINANCIAL ENTITIES MANAGEMENT – APPROVES MODIFICATION TO THE SEMESTRAL LIBOR INTEREST RATE FOR LOAN WITH RESOURCES FROM SECTORAL PROGRAM II LOAN NO. 88 65 719 PRIVATE SECTOR AND PROGRAM BV-C2 TO NAFIBO SAM.
HAVING VIEWED:
Law 1670 of October 31, 1995.
Board Resolution No. 011/99 of March 2, 1999.
Board Resolution No. 113/99 of December 21, 1999.
Board Resolution No. 006/2002 of January 8, 2002.
Note NFB GN – 0784/2002 from the Bolivian National Financial Institution (Nacional Financiera Boliviana) of March 25, 2002.
Report from the Financial Entities Management GEF No. 093/2002 of April 15, 2002.
Report from the Legal Affairs Management SAJU 244/2002 of April 8, 2002.
CONSIDERING:
That Board Resolution No. 011/99 approves the transfer of availability from Sectoral Program II Loan No. 88 65 719 and No. BV-C2 in favor of the Bolivian National Financial Institution SAM (NAFIBO SAM), under the modality of loan on behalf and mandate of the Republic up to the sum of US$35 million, for a term of 15 years, including 3 years of grace for capital amortization, at a rate of 7.15% annual on balances.
That Board Resolution No. 113/99 approves the transfer of availability from Sectoral Program II Loan No. 88 65 719 and No. BV-C2 in favor of the Bolivian National Financial Institution SAM, under the modality of loan on behalf and mandate of the Republic up to the sum of US$1.6 million, for a term of 15 years, including 3 years of grace for capital amortization, at a rate of 7.15% annual on balances.
That Board Resolution No. 006/2002 approves the readjustment effective from January 1, 2002, of the interest rate of the loan granted by the BCB to NAFIBO SAM on behalf of the Republic from Sectoral Program II Loan No. 88 65 719 and No. BV-C2 from 7.15% annual to a variable interest rate calculated on the LIBOR rate for six months in effect the month prior to the due date of each loan amortization installment, applicable until the conclusion of the loan, plus 3%.
That the note from the Bolivian National Financial Institution NFB GN- 0784/2002 requests the modification of the LIBOR rate defined in Board Resolution No. 006/2002 of January 8, 2002, because, given the final beneficiaries, it incorporates a high degree of uncertainty regarding the cost of credit that will ultimately have to be paid. This fact will surely translate into a disincentive to opt for resources from NAFIBO SAM.
That Report GEF No. 093/2002 suggests considering the annual LIBOR rate for 180 days, average of six months (5 previous months and the respective month to the last cancellation), plus 3% adjustable semi-annually.
That Report SAJU 244/2002 concludes that, in compliance with what is provided in Article 54 item j) of Law 1670, it is the attribute of the Board of Directors of the Issuing Entity to consider and authorize the request of NAFIBO SAM, regarding the definition of the LIBOR Rate for the loan granted by the BCB – Sectoral Program II No. 88 65 719 and BV-C2 for US$36,600,000.
THEREFORE,
THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA
RESOLVES:
Article 1.- Modify the first paragraph of Article 1 of Board Resolution No. 006/2002 as follows:
SAYS: Article 1.- Authorize the readjustment effective from January 1, 2002, of the interest rate of the loan granted by the BCB to NAFIBO SAM on behalf of the Republic from Sectoral Program II Loan No. 88 65 719 and No. BV-C2, from 7.15% to a variable interest rate calculated on the LIBOR rate for 6 months in effect on the last day of the month prior to the due date of each loan amortization installment, applicable until the conclusion of the loan, plus 3%.
SHOULD SAY: “Article 1.- Authorize the readjustment effective from January 1, 2002, of the interest rate of the loan granted by the BCB to NAFIBO SAM on behalf of the Republic from Sectoral Program II Loan No. 88 65 719 and No. BV-C2, from 7.15%, to a variable interest rate calculated on the LIBOR rate for 6 months in effect 180 days before the due date of each loan amortization installment, plus 3%. This rate will apply until the conclusion of the loan.”
Article 2.- The Presidency and the General Management are entrusted with the execution and compliance of this Resolution.
La Paz, April 16, 2002
Juan Antonio Morales A.
Juan Medinaceli V. Armando Méndez M.
Roberto Camacho S. Javier Comboni S.
Enrique Ackermann A.
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